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Analysis: Bitcoin, Ethereum, and Litecoin

This following analysis is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

Bitcoin is leading the charge with a new lifetime high above $5000. The altcoins, however, are lagging behind, as bitcoin’s dominance increases to 53.2%, with a market capitalization of $85 billion, according to coinmarketcap.

So, has the market started to differentiate between the coins? Is it going to be a coin specific move henceforth or is it just that bitcoin is leading ahead and the altcoins will soon follow? Let’s see what do the charts forecast?

BTC/USD

We had recommended traders to book partial profits on their long positions in our previous analysis, which were initiated at $4150. We did not book full profits because we expected bitcoin to breakout to new highs and we have been proven correct today. Traders are sitting on huge profits within a short span of time. So, is this a good time to cash in?

The cryptocurrency has broken out with strength. If the bulls manage to sustain above the $5000 levels for three days, it will signal a valid breakout, which is likely to continue higher. The next medium-term target objective on bitcoin is $6197.

As the momentum is clearly in favor of the bulls, we shall continue to hold our remaining 50% positions. However, we shall increase the stops to $4800, just below the low of the breakout bar. If price breaks down below $4800, it will signal a failed breakout, which may start a correction. Until then, we shall continue to trail the stop loss higher to protect our paper profits.

ETH/USD

Ethereum has been trading within the range of $278.88 and $316.61. Attempts by the bulls to breakout of this range have been unsuccessful. On four occasions, the bulls have managed to breakout of $317 on an intraday basis, but have not managed a close above the range.

Hence, we believe that a close above the range will start a new uptrend in the cryptocurrency, which can easily carry it to $354 and thereafter to $368 levels.

Therefore, traders can initiate long positions on a breakout and close above $317. The initial stop loss for the trade can be kept at $278, which can be raised later. However, as the cryptocurrency has seen many fake breakouts in the past few days, please keep the allocation size 50% of normal.

LTC/USD

Litecoin has struggled to pullback following the fall from $93.649 to $32.681. The pullback ended just above the 38.2% Fibonacci retracement levels, which shows a lack of interest among traders in owning litecoin.

However, for the past few days, the digital currency has been trading within the range of $44.16 and $57.729. After the consolidation, if the bulls manage to breakout above the highs of the range, litecoin is likely to gain momentum and rally to $71 levels, which is its first target.

The stop loss for this trade can be kept at $48, which is just below the low made on August 09. If, however, litecoin fails to breakout above $58, we don’t find any trade setups on it.